Is BGC Partners, Inc. (NASDAQ:BGCP) an outstanding investment right now? Hedge funds are reducing their bets on the stock. The number of long hedge fund positions were trimmed by 2 lately.
In the eyes of most investors, hedge funds are viewed as underperforming, old investment vehicles of years past. While there are over 8000 funds in operation at present, we at Insider Monkey look at the elite of this club, about 450 funds. Most estimates calculate that this group has its hands on the majority of all hedge funds' total capital, and by paying attention to their top picks, we have revealed a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we've started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as important, optimistic insider trading activity is a second way to parse down the world of equities. Just as you'd expect, there are a number of stimuli for an insider to cut shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the useful potential of this method if investors understand where to look (learn more here).
Now, we're going to take a peek at the recent action surrounding BGC Partners, Inc. (NASDAQ:BGCP).
Heading into Q2, a total of 8 of the hedge funds we track were bullish in this stock, a change of -20% from the previous quarter. With hedgies' sentiment swirling, there exists a few key hedge fund managers who were upping their stakes considerably.
According to our comprehensive database, AQR Capital Management, managed by Cliff Asness, holds the largest position in BGC Partners, Inc. (NASDAQ:BGCP). AQR Capital Management has a $3.4 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Millennium Management, managed by Israel Englander, which held a $1.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Glenn Russell Dubin's Highbridge Capital Management, and John Overdeck and David Siegel's Two Sigma Advisors.
Because BGC Partners, Inc. (NASDAQ:BGCP) has faced bearish sentiment from the entirety of the hedge funds we track, logic holds that there exists a select few money managers that decided to sell off their full holdings at the end of the first quarter. Interestingly, Jim Simons's Renaissance Technologies dumped the largest investment of the 450+ funds we key on, totaling close to $2.1 million in stock.. Paul Tudor Jones's fund, Tudor Investment Corp, also said goodbye to its stock, about $0.7 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 2 funds at the end of the first quarter.
Bullish insider trading is at its handiest when the company we're looking at has experienced transactions within the past half-year. Over the latest 180-day time period, BGC Partners, Inc. (NASDAQ:BGCP) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let's also take a look at hedge fund and insider activity in other stocks similar to BGC Partners, Inc. (NASDAQ:BGCP). These stocks are GFI Group Inc. (NYSE:GFIG), Medley Capital Corp (NYSE:MCC), FXCM Inc (NYSE:FXCM), Piper Jaffray Companies (NYSE:PJC), and Interactive Brokers Group, Inc. (NASDAQ:IBKR). All of these stocks are in the investment brokerage - national industry and their market caps resemble BGCP's market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|GFI Group Inc. (NYSE:GFIG)||7||0||5|
|Medley Capital Corp (NYSE:MCC)||8||1||0|
|FXCM Inc (NYSE:FXCM)||8||0||6|
|Piper Jaffray Companies (NYSE:PJC)||12||0||3|
|Interactive Brokers Group, Inc. (NASDAQ:IBKR)||13||0||3|
With the results shown by the aforementioned tactics, retail investors must always pay attention to hedge fund and insider trading activity, and BGC Partners, Inc. (NASDAQ:BGCP) shareholders fit into this picture quite nicely.